Supreme Court Takes Cases on Corporate Rights

WASHINGTON  Continuing to explore the limits of corporations’ constitutional rights, the Supreme Court on Tuesday added cases to its docket that will test the scope of companies’ rights to due process and privacy.

The new cases follow the court’s decision in January in Citizens United v. Federal Election Commission, which ruled that corporations and unions have a First Amendment right to spend money in candidate elections.

In two of the cases, the justices will consider how the state secrets privilege, which can allow the government to shut down litigation by invoking national security, applies in a contract dispute between the Navy and military contractors hired to create a stealth aircraft.

In the third case, the justices agreed to decide whether corporations have privacy rights for the purposes of the Freedom of Information Act.

The court’s newest member, Justice Elena Kagan, disqualified herself from four of the new cases, including the one concerning corporate privacy, because she participated in them as United States solicitor general before joining the court in August. She has also recused herself from about half of the roughly 40 cases that had already been on the court’s docket for the new term, which starts Monday, and so will be absent from the bench much of the time in the coming months.

The state secrets case arises in a surprising context. The court has turned back appeals from people who say they were sent abroad to be tortured but whose lawsuits were dismissed after the government invoked the privilege.

This month, a sharply divided 11-member panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, dismissed a lawsuit against Jeppesen Dataplan, a Boeing subsidiary accused of arranging flights for the Central Intelligence Agency to transfer prisoners to other countries for imprisonment and interrogation, on state secrets grounds.

Boeing, as successor to the McDonnell Douglas Corporation, is one of the parties to the state secrets cases the court agreed to hear on Tuesday, Boeing Company v. United States, No. 09-1302, but now it objects to the government’s invocation of the privilege. Its case has been consolidated with the second one, General Dynamics Corp. v. United States, No. 09-1298.

Both arose from a 1988 contract to develop the A-12 Avenger aircraft. Dissatisfied with the contractors’ progress, the Navy terminated the contract three years later and demanded the return of $1.35 billion.

The contractors refused to return the money and sued, saying among other things that their work had been frustrated by the government’s failure to share classified technology. The government disputed that assertion but would not explain why, invoking the state secrets privilege. An appeals court repeatedly ruled against the contractors, saying at one point that the Constitution’s due-process clause does not require that they be able to present “a defense that would threaten national security.”

The leading Supreme Court case on state secrets, from 1953, also concerned an aircraft. In that case, United States v. Reynolds, the widows of men who died when a B-29 bomber crashed in Waycross, Ga., during a secret mission, sued the government for negligence.

The Supreme Court ruled against the widows on state secrets grounds. But the court said things might be different if the government were pressing a claim rather than defending against one.

It would be unconscionable to allow the government to pursue a criminal prosecution, Chief Justice Fred M. Vinson wrote for the majority, “and then invoke its governmental privileges to deprive the accused of anything which might be material to his defense.”

“Such rationale,” Chief Justice Vinson went on, “has no application in a civil forum where the government is not the moving party.”

The new cases are civil rather than criminal, and the parties disagree about which of them is the plaintiff and which the defendant. With interest, the government now seeks about $3 billion.

AT&T seeks to block the release of documents it provided to the F.C.C., which conducted an investigation into claims of overcharges by the company in a program to provide equipment and services to schools. The documents were sought under the freedom of information law by a trade association representing some of AT&T’s competitors.

AT&T relied on an exemption to the law for law enforcement records that could “constitute an unwarranted invasion of personal privacy.”

The United States Court of Appeals for the Third Circuit, in Philadelphia, ruled for the company, relying in part on a definition of “person” in the law that included corporations.

“Corporations, like human beings, face public embarrassment, harassment and stigma” because of their involvement in law enforcement investigations, Judge Michael A. Chagares wrote for a unanimous three-judge panel.

The federal government, represented by Solicitor General Kagan, urged the Supreme Court to reject the argument that the exemption “protects the so-called ‘privacy’ of inanimate corporate entities.”

The court also agreed to hear a case on the exclusionary rule, which sometimes requires the suppression of evidence obtained through police misconduct. The court has cut back on the rule in recent decisions.

The new case, Kentucky v. King, No. 09-1272, will consider a ruling from the Kentucky Supreme Court overturning a drug conviction. The case began when police officers pursued a man suspected of dealing drugs into an apartment complex, heard a door slam but were unsure about which unit he had entered. Smelling marijuana outside one unit, they forced their way in without a warrant.

The police did not find the suspect but did find several people with drugs. The state court said they should not have entered without a warrant and threw out a defendant’s conviction. The attorneys general of 16 states joined Kentucky in urging the Supreme Court to hear the case.

Audio of Arguments

The court also took a small step toward allowing greater public access to its proceedings, announcing that it would post audio recordings of arguments at the court on its Web site a few days after they take place.

The court does not allow cameras in its courtroom but does release same-day transcripts of arguments. Its general practice has been to delay release of audio recordings until the beginning of the next term.

That will take the court out of the business of making judgments about which arguments are newsworthy, a practice that raises First Amendment concerns. But it also means that recordings of major arguments will be released too late to aid most journalistic coverage. On the other hand, the public, practitioners and scholars will have much prompter access to recordings of scores of arguments each term than they had in the past.

The court ordinarily hears arguments on Mondays, Tuesdays and Wednesdays, and recordings of them will now be posted on Fridays.

Susan Swain, president of C-Span, was muted in her praise. “We continue to hope that the court’s next step will be same-day release of all oral arguments, and ultimately, television coverage of its public sessions,” she said in a statement.

The court has been recording arguments since 1955. Many are available at the National Archives and on the Oyez Project, a multimedia archive.

Jerry Goldman, the project’s director, said a transcript was no substitute for a recording.

“It’s the difference between reading the libretto and listening to the opera,” he said. “It’s the emotional component.” ADAM LIPTAK

Roberts Sells Stock

Chief Justice John G. Roberts Jr. recently sold his shares of Pfizer stock so he could participate in two coming cases involving the company, the world’s biggest drug maker, a Supreme Court spokeswoman said Tuesday.

Patricia Estrada, the spokeswoman, said Chief Justice Roberts sold his stock on Aug. 31 specifically so he could hear the cases. A financial disclosure form showed that he owned $15,000 or less in Pfizer stock last year, and he had previously recused himself from cases involving the company.

The sale was reported on the Web site of The Wall Street Journal. DUFF WILSON